Israel Technology Acquisition (ISLT), which went public on July 14, 2005, has announced that it is acquiring IXI Mobile, In.c, the developer of a messaging solution for the mass market. The transaction is scheduled to close during the third quarter of 2006.
Israel Technology Acquisition Corp. and IXI Mobile, Inc. Agree to Merge
Wednesday March 1, 6:50 am ET
NEW YORK, March 1 /PRNewswire/ -- Israel Technology Acquisition Corporation (OTC Bulletin Board: ISLTU.OB; ISLT.OB; ISLTW.OB) and privately held IXI Mobile, Inc. ("IXI Mobile"), developer of the Ogo(TM) family of mobile messaging solutions for the mass market, announced today that they have entered into a definitive agreement pursuant to which IXI Mobile will merge with ITAC Acquisition Subsidiary Corp., a wholly owned subsidiary of Israel Technology Acquisition Corp. ("ITAC"). As a result of the merger, IXI Mobile will become a wholly-owned subsidiary of ITAC. Immediately following the merger, the holders of equity interests of IXI Mobile (including holders of employee options and warrants to purchase IXI Mobile common stock) will own or have the right to acquire approximately 7.8 million shares of ITAC common stock. Of this amount, approximately 1.4 million shares will be available for issuance to IXI Mobile's senior management and employees under IXI Mobile's Employee Stock Option Plan. As further consideration, the holders of equity interests of IXI Mobile will receive or have the right to acquire up to an additional 10.0 million ITAC shares based on attaining various targets described below. There are currently 7.8 million shares of ITAC common stock outstanding. If approved by the ITAC stockholders, the transaction is expected to close in the third quarter of 2006. At closing, ITAC will change its name to IXI Mobile, Inc. (the "Company").
IXI Mobile, headquartered in Redwood City, California, with research and development facilities in Israel and Romania, develops the Ogo family of devices and end-to-end solutions that deliver popular mobile applications, including instant messaging (IM), email, SMS and news, on optimized, easy-to-use handheld devices. Since launching Ogo in September 2004, IXI Mobile has shipped approximately $20 million of Ogo products to customers including AT&T Wireless (now Cingular Wireless(1)), Swisscom Mobile, the leading Swiss mobile operator, and e-kolay.net, one of the largest Internet Service Providers ("ISPs") in Turkey, in collaboration with Telsim (now Vodafone) and Avea, leading Turkish mobile operators. IXI Mobile has recently signed a contract to sell Ogo to one of the largest ISPs in Europe with over 20 million subscribers. The agreement is expected to be publicly announced by IXI Mobile's customer.
The Transaction
Under the terms of the agreement, the equity interests in IXI Mobile will be exchanged at the closing for approximately 7.8 million shares of ITAC common stock (or the right to acquire such shares). Of this amount, approximately 1.4 million shares will be available for issuance to IXI Mobile's senior management and employees under IXI Mobile's Employee Stock Option Plan. Following the merger, the Company will have access to the approximately $33,500,000 currently held in ITAC's trust account, which will be used for its working capital to support current opportunities and future sales initiatives, to pay expenses of the transaction, and to pay the per- share amount to any ITAC stockholder that seeks to convert his shares into cash. In addition, the funds may be used to repay certain IXI Mobile indebtedness.
As further consideration, the holders of equity interests of IXI Mobile (including holders of employee options and warrants to purchase IXI Mobile common stock) will receive or have the right to acquire up to an additional 10.0 million shares based on attaining the following targets:
-- If revenues exceed $45 million in 2006 -- 1.0 million shares
-- If net profits reach $15-25 million in 2007 -- 1.0 million shares (linear allocation)
-- If net profits reach $20-45 million in 2008 -- 2.0 million shares (linear allocation)
-- If the common stock trades, for 20 out of 30 days, at a price of at least:
-- $8.50 - 2.0 million shares
-- $9.50 - 2.0 million shares
-- $12.00 - 2.0 million shares
In addition, certain IXI Mobile senior management members will be granted options to purchase up to 1.5 million additional ITAC shares at $5.00 per share, becoming exercisable upon attaining the same net profit and share price milestones detailed above.
IXI Mobile's audited financial statements for 2004 and 2005 are currently being prepared in accordance with U.S. GAAP and will be included in the proxy statement/prospectus to be mailed to ITAC stockholders following clearance from the U.S. Securities and Exchange Commission.
About IXI Mobile and Ogo Solutions
Ogo devices, with features such as a clamshell form factor, QWERTY keyboard and large screen, are designed for the optimal delivery of mobile data applications. To facilitate Ogo deployment, IXI Mobile provides all required back-end components, as well as launch and support services. The complete Ogo solution, including devices and support services, is sold to mobile operators, mobile virtual network operators (MVNOs), and ISPs worldwide.
IXI Mobile's Ogo solution appeals to the mass market with its unique application set and low price. While IXI Mobile does not directly control Ogo's pricing to consumers, Ogo devices have been sold at retail from $0 (fully subsidized by the service provider) to $99, with a monthly service fee of approximately $15-18, offering a compelling alternative to higher-priced offerings.
Large, Growing Industry
IXI Mobile operates in the large and growing global mobile communications market. In 2005, worldwide mobile phone subscribers exceeded 2.1 billion (according to Portio Research). To date, operators have relied on mobile voice and data services, such as SMS, MMS, and multi-media downloads, as key revenue drivers. As the market matures, however, operators are looking to leading desktop applications, including email and instant messaging (IM), to increase mobile data traffic.
Email and IM are highly popular applications, with worldwide email users estimated at over 660 million in 2005 (according to Radicati Group), and worldwide IM users estimated at over 300 million in 2005, generating 1.2 billion messages daily (according to ComScore Media Metrix and IDC). These applications, while popular on the PC, have had limited mobile penetration. In addition, mobile email has largely been focused on the corporate market rather than the mobile mass market. In fact, the mobile email leader, catering mainly to corporate users, has only 4.5 to 5.0 million subscribers.
Seasoned Management Team
IXI Mobile's seasoned management team is led by Mr. Amit Haller, Co-Founder, President and Chief Executive Officer. Mr. Haller is a wireless industry veteran with over 17 years experience. He was founder and CEO of Butterfly VLSI, Ltd., a pioneer in short distance wireless technology that was sold to Texas Instruments in 1999. At Texas Instruments, Mr. Haller managed the group in charge of Bluetooth technology. Mr. Haller stated, "We are very excited about pursuing this partnership with Israel Technology Acquisition Corp. We look forward to becoming a publicly traded entity through this combination and having the additional resources to advance our global sales initiatives and continue to bring high-quality mobile solutions to market."
Mr. Gideon Barak, Co-founder and Chairman, brings over 25 years experience in the communications industry. Mr. Barak served as CFO of DSP Group Inc. He was Founder and CEO of DSP Communications (DSPC), which was spun out from DSPG and was sold to Intel Corporation. He also served as Founder and Chairman of Envara, Inc. and Butterfly VLSI, which were sold to Intel and Texas Instruments, respectively. He also served as Director of Modem-Art Ltd. and Widcomm, Inc. when they were acquired by Agere Systems and Broadcom Corporation, respectively. Mr. Barak serves as a Director of additional semiconductor and communications companies, including Metalink Ltd. and Advasense (founder and Chairman), and also serves as venture partner with Benchmark Capital.
<snip>
biz.yahoo.com |
